Chinese conglomerate HNA’s efforts to strengthen its finances have been dealt a blow with the collapse of plans to raise up to SFr1.3bn ($1.37bn) by listing Gategroup, the Swiss airline catering business it acquired less than two years ago.

HNA had planned to float up to 65 per cent of Gategroup on the Swiss stock exchange on Tuesday, but just hours before trading was due to start, the listing was abandoned after potential investors apparently baulked at the proposed terms.

The failure of the initial public offering highlighted wariness about taking stakes in companies alongside HNA, although bankers close to the deal said it also flopped because of the price demanded. 

“There was too big a gap in valuation between their expectations,” said one person close to the deal.

HNA has an estimated $20bn in debt maturing this year or next. The company has sold some assets and extended credit arrangements with banks which — until the Gategroup setback — had helped it navigate a turbulent first three months of the year.

The IPO’s collapse also cast doubt on whether HNA would push ahead with separate plans to raise money from a public offering of shares from aviation services group Swissport. That listing could prove even more challenging than Gategroup’s because Swissport’s finances are more intertwined with its Chinese parent, due to a series of short-term loans the Swiss group has made to HNA affiliates. 

“Gategroup has a much cleaner structure and is significantly lower leveraged than Swissport,” said one bond investor.

Swissport on Monday reaffirmed its intention to seek an IPO in the second quarter of this year. “Preparations are well on track with regards to the milestones of our IPO schedule and feedback from potential investors has been very positive,” it said.

The company is in the process of raising a €325m loan to fund its acquisition of Australia’s Aerocare, which Barclays has underwritten. It disclosed to debt investors last week that it was also receiving a €100m equity investment from a third party to help fund the acquisition. 

“I guess Swissport’s bonds are still benefiting from improved sentiment around this third-party investment in conjunction with the Aerocare acquisition,” one investor said.

Swissport has not indicated the identity of this third-party group, according to several debt investors, telling lenders only that it is a “western institutional investor”.

For the Gategroup IPO, HNA had lined up both Switzerland’s biggest banks — Credit Suisse and UBS — as joint global co-ordinators. JPMorgan also acted as joint bookrunners. Berenberg, ING, Banco Santander and UniCredit were co-bookrunners, while Lazard was an IPO adviser.

HNA ran into controversy in Switzerland last year when the country’s takeover watchdog ruled that the Chinese group had provided “ untrue or incomplete” information regarding its ownership when it acquired Gategroup for SFr1.4bn in 2016. 

By retaining more than a third of the shares after the IPO, HNA would have retained considerable sway over Gategroup, which worried some potential investors, said another person close to the deal. “In other companies, an anchor shareholder is welcomed. This time, an anchor shareholder didn’t help a lot.”

Gategroup’s IPO also ran into difficulties because of recent stock market volatility and fears of a global trade war, they said.

The IPO’s collapse is a setback for Gategroup, which would have received SFr350m to fund international expansion. Gategroup would not comment on the reasons for the IPOs failure or its future relationship with HNA. But Xavier Rossinyol, chief executive, said in a statement that the Swiss group would stick to its growth strategy “which has positioned Gategroup as the market leader and allowed us to double results over the past two years”.

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